Correlation Between Solution Advanced and Wireless Power
Can any of the company-specific risk be diversified away by investing in both Solution Advanced and Wireless Power at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Solution Advanced and Wireless Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solution Advanced Technology and Wireless Power Amplifier, you can compare the effects of market volatilities on Solution Advanced and Wireless Power and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Solution Advanced with a short position of Wireless Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and Wireless Power.
Diversification Opportunities for Solution Advanced and Wireless Power
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Solution and Wireless is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced Technology and Wireless Power Amplifier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wireless Power Amplifier and Solution Advanced is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Solution Advanced Technology are associated (or correlated) with Wireless Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wireless Power Amplifier has no effect on the direction of Solution Advanced i.e., Solution Advanced and Wireless Power go up and down completely randomly.
Pair Corralation between Solution Advanced and Wireless Power
Assuming the 90 days trading horizon Solution Advanced is expected to generate 1.1 times less return on investment than Wireless Power. In addition to that, Solution Advanced is 1.54 times more volatile than Wireless Power Amplifier. It trades about 0.06 of its total potential returns per unit of risk. Wireless Power Amplifier is currently generating about 0.1 per unit of volatility. If you would invest 229,500 in Wireless Power Amplifier on September 13, 2024 and sell it today you would earn a total of 10,500 from holding Wireless Power Amplifier or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solution Advanced Technology vs. Wireless Power Amplifier
Performance |
| Timeline |
| Solution Advanced |
| Wireless Power Amplifier |
Solution Advanced and Wireless Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Advanced and Wireless Power
The main advantage of trading using opposite Solution Advanced and Wireless Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced position performs unexpectedly, Wireless Power can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Wireless Power will offset losses from the drop in Wireless Power's long position.| Solution Advanced vs. Samsung Electronics Co | Solution Advanced vs. Samsung Electronics Co | Solution Advanced vs. LG Energy Solution | Solution Advanced vs. SK Hynix |
| Wireless Power vs. Daejoo Electronic Materials | Wireless Power vs. Interflex Co | Wireless Power vs. Solution Advanced Technology | Wireless Power vs. Busan Industrial Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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